Global Markets Steady Amid Middle East Tensions and AI Volatility

Global markets stabilized amid ongoing Middle East tensions and heavy AI stock trading. Oil prices dipped following U.S. strikes on Iran. Despite temporary setbacks, tech shares rebounded as European markets saw gains. HSBC Chief Strategist noted the sensitivity of bond markets to the Middle East situation, impacting global interest rates.

Global share and bond markets, alongside oil prices, found stability on Thursday after recent Middle East conflict reignited concerns, compounded by a sell-off in AI chipmaker stocks.

The United States launched overnight attacks on Iran, aiming to secure the Strait of Hormuz for shipping, causing a dip in oil prices for only the second time in a week. President Donald Trump assured there would not be a full-blown war despite ending the interim ceasefire with Tehran. Consequently, Brent crude futures declined below $77 per barrel, easing global borrowing costs.

In the bond markets, U.S. and European yields saw minor adjustments, while Japanese and Australian 10-year yields reached notable highs. In Europe, tech stocks bounced back, with chipmaker Siltronic rallying over 10%. Positive news from China about AI sector access and South Korea's SK Hynix IPO success also buoyed sentiments. HSBC's Max Kettner highlighted the volatile nature of these developments, emphasizing caution for institutional investors amid prevalent uncertainties.